{"id":148333,"date":"2023-05-31T10:31:00","date_gmt":"2023-05-31T14:31:00","guid":{"rendered":"https:\/\/44.250.171.167\/?p=148333"},"modified":"2023-06-02T10:44:13","modified_gmt":"2023-06-02T14:44:13","slug":"total-transport-systems-limited-total-q4-fy23-earnings-concall-transcript","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/total-transport-systems-limited-total-q4-fy23-earnings-concall-transcript\/","title":{"rendered":"Total Transport Systems Limited (TOTAL) Q4 FY23 Earnings Concall Transcript"},"content":{"rendered":"

Total Transport Systems Limited (NSE:TOTAL) Q4 FY23 Earnings Concall dated May. 31, 2023<\/span><\/strong><\/p>\n

Corporate Participants:<\/h2>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Nitin Phadke<\/strong> — Vice President, Finance<\/em><\/p>\n

Analysts:<\/h2>\n

Sudhir Bheda<\/strong> — Right Time Consultancy — Analyst<\/em><\/p>\n

Hiral Nandu<\/strong> — Kalpavruksh Capital — Analyst<\/em><\/p>\n

Nikhil Arora<\/strong> — — Analyst<\/em><\/p>\n

Daniel<\/strong> — — Analyst<\/em><\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

Presentation:<\/h2>\n

Operator<\/strong><\/p>\n

Ladies and gentlemen, good day and welcome to Total Transport Systems Limited Q4 and FY ’23 Earnings Conference Call.<\/p>\n

This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not guaranteed of future performance and involve risks and uncertainties that are difficult to predict.<\/p>\n

[Operator Instructions] Please note that this conference is being recorded.<\/p>\n

I now hand the conference over to Mr. Shrikant Nibandhe, Promoter and Director from Total Transport Systems Limited. Thank you and over to you, sir.<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

Thank you, ma’am. Good afternoon, everyone. I would like to wish you all a very warm welcome to Total Transport Systems Limited earnings conference call for the fourth quarter and full year ended 31st March 2023. I would like to begin by expressing my gratitude to all of you for taking time to join us today.<\/p>\n

With me today on the call is Mr. Makarand Pradhan, Promoter and Managing Director; Mr. Sanjiv Potnis, Promoter and Executive Director of the company; Mr. Nitin Phadke, Vice President, Finance of Total Transport, and a team from the AdFactors, who are our investor relations team with us on the call.<\/p>\n

I would like to share a brief overview of company before we get into the business and financial performance. Total Transport Systems Limited focuses on four logistic activities, namely consolidation of export cargoes, deconsolidation of import cargoes, full load containers, end-to-end logistics services, which includes the transportation of cargo from the shippers factory to port, custom clearance, multimodal transport, and send the cargo to desired destination as per the shipper guidance. We also do the airfare from India to worldwide destinations.<\/p>\n

The reputation has ensured our company’s competitive rate for consolidated shipments on a regular basis. We specialize in the business of LCL & FCL forwarding for both exports and imports. TTSL has a sizable market share in India’s LCL segment and the company is one of the market leaders in cargo consolidation. In addition to providing easy logistics, the company emphasizes timely delivery, diversifying its services offering, maintaining long-term relationships with its customers, and offering value-added services to customers at all the time.<\/p>\n

Our company is having lots of contracts and received recognitions as one of the India’s top groupage traffic providers in this sector. Additionally, we are in a good position to benefit from the shifting trends in the logistics sector.<\/p>\n

TTSL is a member of the world’s fifth largest consolidator network, namely iCargo Alliance, putting the company on the world map and gaining recognition worldwide. The alliance, which has formed along with C P World Group and the Shanghai International Transportation Services Company Limited of China, provides access to over 89 countries, 1,100 locations with 166 offices globally. The company also has two 100% subsidiaries, namely CP World Logistics India Private Limited, which also do the cargo consolidation and the freight business. And the OneWorld Logistics Private Limited. OneWorld Logistics is engaged in providing last-mile delivery services to customers. OneWorld offers services of last mile, rural mile and rural B2B delivery services. It operates under the brand name of Abhilaya, which is focused on providing last mile delivery services, especially for Amazon and Flipkart and Jio. With a target to work with other e-commerce platform players at Pan-India level. It is an on-demand last mile delivery service provider, offering tech-enabled delivery solutions for e-commerce, FMCG, pharma, and online and offline retailers.<\/p>\n

This is really a promising endeavor. The last mile delivery services have become the need of an hour across several sectors, especially with the globalization of e-commerce across rural India. Post the pandemic, online shopping has become more popular and having access all in the villages among the markets. As you all know, e-commerce is penetrating the rural area of India very well, thanks to the advanced smartphones and the high-speed internet provided by the government of India. This trend gives us confidence of our Abhilaya venture, wherein we are offering last-mile services.<\/p>\n

Another point that I would like to highlight that we are cognizant of our — impact on our environment impact and trying to minimize the carbon footprint. In the line of this, we launched a few EV scooters in the first half of this financial year for smooth and timely delivery for Amazon order, mainly in Maharashtra and in Gujarat region. It is just one step of many towards our greener initiatives. Additionally, to complement our organic growth, the company has acquired — Total Transport has acquired 60% stake in the Custom House Agency Company, namely R N Freight Forwarders Private Limited, which help us to offer the end-to-end services to our most valuable customers.<\/p>\n

We also started a new project cargo division wherein we get the chance to move the shipments of more tanks, more of heavy machinery from one port to international ports like Kenya or even Southeast Asia or in Europe. And these services customers and eventually become a one-stop shop for all our — all the logistics requirements.<\/p>\n

The company’s ability to offer end-to-end services along with its specialized skillset and experience management team has gained the confidence to offer its team clients making it a top choice in the Indian cargo market.<\/p>\n

Now turning to our financial performance. Fourth quarter of financial year ’23, we reported a total INR113.16 crores in revenue during Q4 of financial year ’23. This decrease in the revenue mainly due to the decrease in the freight rate of more than 80% in the shipping market.<\/p>\n

Our EBITDA for the quarter stood INR1.19 crore, decreased EBITDA on account of lower revenue and higher employee expenses on account of one-time bonus. Our net profit during this quarter was INR1.45 crore, as against INR1.71 crore for the fourth quarter of financial year 2022. EPS for this quarter is INR0.59.<\/p>\n

Full year, we reported INR590.27 crore revenue in financial year ’23, 1.21%increase year-on-year wise. Revenue is flat due to the lower volumes and other microeconomic factors. Our EBITDA for this period stood at INR14.62 crores. Our net profit during this full year was INR4.65 crore as against profit of INR9.08 crore in FY ’22. Decrease in fact is mainly due to the — due to dip in freight costs. Net profit margins stood at 0.79%. EPS as for this period is INR3.07.<\/p>\n

This is all from our side. I think we can now take questions from our shareholders.<\/p>\n

Questions and Answers:<\/h2>\n

Operator<\/strong><\/p>\n

[Operator Instructions] The first question is from the line of Sudhir Bheda from Right Time Consultancy. Please go ahead.<\/p>\n

Sudhir Bheda<\/strong> — Right Time Consultancy — Analyst<\/em><\/p>\n

Hello sir. Good morning.<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

Good afternoon, sir.<\/p>\n

Sudhir Bheda<\/strong> — Right Time Consultancy — Analyst<\/em><\/p>\n

And hearty congratulations for the good set of numbers under the circumstances where freight rate has come down by 80% to 85%. And also I will appreciate you for the startup company, OneWorld Logistics, which has now gone to INR68 crore turnover in just four years. So again, from the shareholder side, I appreciate that.<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

Thank you very much, sir.<\/p>\n

Sudhir Bheda<\/strong> — Right Time Consultancy — Analyst<\/em><\/p>\n

I have two questions. One, now that startup company, last mile delivery company OneWorld Logistics has grown to INR68 crore, but the losses have gone to INR7 crores. So what are your plans in the next two to three years for OneWorld Logistics? And what is the medium term and long-term outlook for this company? That is number one. And number two, your main business, standalone, what percentage of growth do you expect in FY’24?<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

Yes, sir. Sir, I’ll answer your question about — first question. Last mile delivery, last year, we did various — did enter into various models of direct transportation services with Amazon in the Diwali time, and which given us a bad — I mean, bad experience due to operational issues. As they committed us with the certain volumes, can be — they made us available during the Diwali season. And that time we hired a truck on the fixed basis, assuring them the load as well as the number of plying between these route. But unfortunately, the volumes got dropped due to the orders were less on the — with Amazon. So, but we had to pay this money to our vendors we committed to them. So, this was one of the setbacks. Also, the last year, we added some stations of — basically, in the Jammu Kashmir area, where we had some issues over deliveries, over manpower and all. So, in the month of March, we had taken a cautious decision, and we started closing the non-productive, non-operating, non-operative profit stations across India. So we cut down almost 45 plus stations of Flipkart and almost three to four stations of Amazon. But at the same time, Amazon has given us certain other stations in other areas like Rajasthan and certainly the MP. So that has been compensated.<\/p>\n

So the necessary steps have been taken that loss making stations, we already closed down. We will not enter into any, you know, any seasonal businesses like transportation or warehousing or, you know, particular seasons or taking the load. So this has impact, started giving us the impact. And I’m really happy to say that in the month of April, we could cut down the loss to the minimal. Earlier it was INR50 lakhs per month, which has dropped down to the now INR89 lakhs a month. So that is a big step we have already taken.<\/p>\n

Furthermore, we have started two new models here in Mumbai and in Maharashtra. We have joined with the — made a JV with one company called Go4Fresh, and they deal with imported foods and vegetables. They buy from the importers and we are exporting distribution for them to the western side of the Mumbai City. And soon the 15 pin posts are already up right from Dahisar, Borivali to Goregaon and coming up to the Khar area. Soon it will be added central side and then we’ll move on to the Vashi. So we have target by end of this financial year, whish should go to INR25 crores of turnover in topline. And this is giving us almost 2.5% margin. So this is not a loss-making model what we are entered into.<\/p>\n

Further, we made an agreement with two e-commerce small players here in Mumbai. And they have, every day, close to 50,000 shipments of various brands. They wanted to distribute to the — from Bhiwandi area to Mumbai as well as the New Bombay area. So we started that activity in the late second week of April onwards. So that activity is now picking up very well. We are a little bit, I think, close to 2,000 shipments a day on June month. So these also activities is giving us some markings on the top line.<\/p>\n

So, all combination together I am sure for the financial year 2024 we should turn the OneWorld Logistics into — from red at the PBT level to Black in the PBT level definitely.<\/p>\n

The second question is Total Transport Systems growth, there is a huge drop in the freight levels of the variant in line, which is a slack in the demand and the addition in the ships, number of ships and as well as container inventory has been improved a lot. Still, we could manage to get — manage to retain our position because we are more focused in the CIS and Russia sector, this is more of niche market and it’s not more competitive or not where many players are operating on this line. So we are more focused on this area, which is giving us, you know, decent profitability as well as volumes also increasing in this. So, with these all combinations and new project division we started, we also handle ships projects from some from Bombay port, some from Mundra, some from overseas like Manila or Singapore to that is Mombasa, that is Africa. So we are moving some big machinery, we have moved some lifeboats of, you know, to be put on the ships and all.<\/p>\n

So, activity is really picking up fast and people are realizing that we are also are in this market. So I am sure slowly we should get larger parcels and this activity should give us the good return by end of this financial year.<\/p>\n

So, clubbing all together, the projections what we had in this financial year, I’m sure we — with all strength and focus and hard work, we should be able to achieve that.<\/p>\n

Sudhir Bheda<\/strong> — Right Time Consultancy — Analyst<\/em><\/p>\n

Great, great. Congratulations once again and thanks for the opportunity to ask the question and all the best.<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

Thank you, sir. Thank you very much, sir.<\/p>\n

Operator<\/strong><\/p>\n

Thank you. We have the next question from the line of Hiral Nandu from Kalpavruksh Capital [Phonetic]. Please go ahead.<\/p>\n

Hiral Nandu<\/strong> — Kalpavruksh Capital — Analyst<\/em><\/p>\n

Congratulations for the good numbers. I just wanted to understand as we see the freight rates were dropped during the last year for by around 80 plus percentage. So has there been any upward revision in the freight rate in recent times and what is that percentage on how much sustainable that rate would be or what will be the future outlook on the freight rate? What do you see in that?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Can I answer this Shrikant?<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

Yes, yes.<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Okay, this is Pradhan. Okay, in the last three months there has been no upward revision in the freight level. There is neither a downward revision because what we think is this is the market has bottomed out. [Technical Issues]<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

His connection got lost.<\/p>\n

Operator<\/strong><\/p>\n

I am sorry sir. May I request the members of the management, the other members to please continue as sir’s line has been disconnected. Please continue while I try to reconnect, Makarand sir.<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

Yes, so the main thing that happened in the last quarter of the last year, I mean third quarter from the last year, new ships which has come in the market with the higher capacity. At the same time, the refugees which have been seen in this whole of Europe due to Ukraine-Russia war and the demands and all this has been slow down, which has impacted on the global cargo movements definitely. So as a shipping alliance, total review of cargo movement worldwide, what we see that this trend will continue for next two quarters. And we anticipate that things should start improvisation from the January 2024 almost. So with this freight level for the — from India in and out to Europe as well as U.S., South Central America, maybe some Africa sectors will be lower down. So there is a huge capacity or rather huge, there is a huge chance of maintaining the freight levels for CIS destinations because these are very odd destinations. There is no regular ship services. And many destinations are inland container depots. So there has to be multimodal transportation that needs to be done to reach the cargo there. Plus, Russia is picking up very, very well, especially pharma cargo and engineering goods. So these are the two advantages what we have today. But overall shipping freight levels, we anticipate that we will lie low till third quarter of this financial year.<\/p>\n

Hiral Nandu<\/strong> — Kalpavruksh Capital — Analyst<\/em><\/p>\n

Okay. And what would be the rate per ton, approximate, range I’m trying to understand.<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

It is not per ton, it is actually per sector wise it goes on. Like today European sector which we in the peak season of Corona which we have loaded $8,000 per container. Today it is available at the rate of $800 a container. So it is a huge reduction in the rate because ship capacity has gone up with the rise. Secondly, China, which were making the contribution of this zero policy of corona, now they had opened up since last quarter. But still, they need to get that kind of order from the various countries, mainly Europe and South Central America, so they can gear up their production. So with all the — things should start improvisation from 2024 onwards, early 2024 onwards.<\/p>\n

Hiral Nandu<\/strong> — Kalpavruksh Capital — Analyst<\/em><\/p>\n

Okay, great. Thank you. Thank you, sir, for your time, sir.<\/p>\n

Operator<\/strong><\/p>\n

Thank you. The next question is from the line of Nikhil Arora [Phonetic], an individual investor.<\/p>\n

Nikhil Arora<\/strong> — — Analyst<\/em><\/p>\n

Hello?<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

Yes, sir.<\/p>\n

Nikhil Arora<\/strong> — — Analyst<\/em><\/p>\n

Yes. Thank you for the opportunity, sir. First question is, our exports have been predominantly higher than the imports. So if you can throw some light, like are exports expected to increase or — sorry, imports are expected to increase or exports will still increase?<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

I did not understand your question. Can you repeat it, please?<\/p>\n

Operator<\/strong><\/p>\n

I’m sorry to interrupt, Mr. Arora, if I could request you to use your handset please to ask your question.<\/p>\n

Nikhil Arora<\/strong> — — Analyst<\/em><\/p>\n

Sure. Just a second.<\/p>\n

Operator<\/strong><\/p>\n

Thank you.<\/p>\n

Nikhil Arora<\/strong> — — Analyst<\/em><\/p>\n

Am I audible now?<\/p>\n

Operator<\/strong><\/p>\n

Yes, sir.<\/p>\n

Nikhil Arora<\/strong> — — Analyst<\/em><\/p>\n

So our exports have predominantly been higher than the imports. So are imports expected to increase, or exports will still lead the race?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Exports will still lead the race as per the statistics.<\/p>\n

Nikhil Arora<\/strong> — — Analyst<\/em><\/p>\n

Okay. And sir, what is the current number of shipments we are doing per month?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

On an average, we do about 36,000 containers per annum. So about 3,000 containers. And our mix is about 40:60 or 45:55.<\/p>\n

Nikhil Arora<\/strong> — — Analyst<\/em><\/p>\n

Okay, sir. And who are the top contributing clients and if any new client addition which has happened recently?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

We are into retailing. Our major customers, 95% of the business comes from freight forwarders. And if you want to talk about names, it is like Express Transport, Velji Dosabhai and Company, even Tata Motors have cargoes carrying for Reliance, Ranberry and there are many, Raymonds is one of them. So it all depends. We don’t depend on one single customer for our volumes. To do this volume, we have nearly 1,100 customers active.<\/p>\n

Nikhil Arora<\/strong> — — Analyst<\/em><\/p>\n

Also, if there are any new projects which are there in the pipeline for this financial year?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Yes, we are working on various project transport and we will see the results very soon. In the last two months we have done three of them and we expect that we will have some more projects coming in our way in the coming quarters.<\/p>\n

Nikhil Arora<\/strong> — — Analyst<\/em><\/p>\n

Okay, sir. In the last call, you said that we were about to get some 70 odd stations from Flipkart. So can you throw some light like what is the current status of that?<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

So we already got 70 — I mean, we’ve given confirmation of 70, out of which 58 stations are already up and balance stations we said no, we won’t doing it up because this is very close to Srinagar area. So we had withdrawn from that. So 58 stations is already up and now our monthly volume all put together Amazon and Flipkart, we are handling close to 22.7 million shipments a month, that is 22.7 lakh shipments per month. And from June onwards, we should be touching close to 30 lakh shipments a month.<\/p>\n

Nikhil Arora<\/strong> — — Analyst<\/em><\/p>\n

Okay, sir. And my last question, the long term and the short term borrowings have reduced as compared to FY ’22. So, have we repaid any debt?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Yes, actually we had one WPTL, working capital term loan from Axis Bank that we repaid as our cash flow due to corona and all this high freight rates has improved a lot. So we repaid that loan. So that’s how the things have been changed.<\/p>\n

Nikhil Arora<\/strong> — — Analyst<\/em><\/p>\n

Okay sir, thank you for the information and all the best for the next call, sir.<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

Thank you, sir. Thank you for the question.<\/p>\n

Operator<\/strong><\/p>\n

Thank you. The next question is from the line of Daniel [Phonetic], an individual investor. Please go ahead.<\/p>\n

Daniel<\/strong> — — Analyst<\/em><\/p>\n

Thank you. Regarding the balance sheet, our fixed assets increased from INR9 crore to INR12 crore. So have you purchased any assets? If you could throw some light on this.<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

Yes, we have purchased few trailers for our MT container transportation as well as we started now full load, full — bonded cargo transportation between our office, Ahmedabad and Bombay. So we have purchased four trailers into that. Plus we have purchased a few containers, empty containers from the one empty container depot. So we can also, this is the asset what we have. So that’s how the whole investment has been done in this area.<\/p>\n

Daniel<\/strong> — — Analyst<\/em><\/p>\n

Okay, sir. And then what is our current capital cycle for financial year 2023?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

You mean DSO? Hello?<\/p>\n

Daniel<\/strong> — — Analyst<\/em><\/p>\n

Our current capital, sir. Yes, sir.<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

DSO is now dropped to the 42 days.<\/p>\n

Daniel<\/strong> — — Analyst<\/em><\/p>\n

Okay. In FY ’22, tax rate which is 32%, it has increased to 47% in FY ’23. So, is there any reason in the increase of tax rate?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

I will check on that. Okay. Hello. Mr. Nitin is there?<\/p>\n

Nitin Phadke<\/strong> — Vice President, Finance<\/em><\/p>\n

Sir, can I give the answer?<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

Yes, Nitin.<\/p>\n

Nitin Phadke<\/strong> — Vice President, Finance<\/em><\/p>\n

This is Nitin Phadke. The tax rate has not changed. But because of the loss which is there from OneWorld, which has gone up — the profit figure has been distorted, and that’s why you feel that the rate had changed. If you see standalone the rate is 26%, which is as per the income tax normal rate.<\/p>\n

Daniel<\/strong> — — Analyst<\/em><\/p>\n

Okay. Also talking about interest cost, it increased by around 50-55% on year on year basis. So what has led to this increase in the interest cost?<\/p>\n

Nitin Phadke<\/strong> — Vice President, Finance<\/em><\/p>\n

Sir, interest percentage which was there in the last financial year, it was 8.55%. But in the current — in the financial year ’22-’23 as you are aware that RBI has increased the rate every time. It is more than 11%. That has basically affected the interest cost.<\/p>\n

Daniel<\/strong> — — Analyst<\/em><\/p>\n

Okay. And there was a shortfall in EBITDA for Q4 FY ’23 on a Y-o-Y basis. So is there a reason behind this in the EBITDA?<\/p>\n

Nitin Phadke<\/strong> — Vice President, Finance<\/em><\/p>\n

The reason behind this is basically the drop down in the freight rates, the turnover has also been reduced and the margin has also reduced. That’s the reason the profit has reduced, obviously it will affect the EBITDA.<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Can I — I just want to give one clarification here.<\/p>\n

Daniel<\/strong> — — Analyst<\/em><\/p>\n

Yes, sir.<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

The freight rates have gone down by 80%, okay? Now let’s assume a freight for Europe, what Mr. Shrikant mentioned earlier. It was $8,000. Today it is $800. So obviously on $8,000 we could have a margin of maybe $500, maybe $400. Whereas when the freight levels are so down, we have — our margins get reduced to a certain percentage, maybe 5%, maybe 7%. So that is the effect. But what we have done is it is not seen so much on the figures is because our volumes have gone up quite a lot. And secondly, we have gone very aggressive into the CIS region and Africa. So still on certain sectors we have been able to maintain our profitability to a great extent. And that’s the reason it is not seen that there is a, though there is a drop of 80% of the freight levels, our profits or our overall turnover hasn’t dropped so much.<\/p>\n

Daniel<\/strong> — — Analyst<\/em><\/p>\n

Okay, noted. Last question from me, sir, about the revenue split in our vertical business. So if you could share the revenue split for FY ’23?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Shrikant will…<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

Revenue split?<\/p>\n

Daniel<\/strong> — — Analyst<\/em><\/p>\n

Yes, sir.<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

This Total Transport has achieved the top line of INR522 crores and INR68 crores [Phonetic] is of OneWorld Logistics Private Limited of last mile delivery.<\/p>\n

Daniel<\/strong> — — Analyst<\/em><\/p>\n

Okay. And what exactly are the growth drivers, which is, you know, contributing to the revenue, if you could highlight on that?<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

Of Total Transport you mean to say?<\/p>\n

Daniel<\/strong> — — Analyst<\/em><\/p>\n

Yes, sir.<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

This growth highlight is the same that is a month of December and Jan we had a big business for the Russia and some to CIS destination and it was a quite big number of containers we moved there and that was with the different margins what we had. So this is one of the biggest highlight, I mean biggest thing happen, good thing happen to us. Secondly, if you see the rate levels started dropping from the month of November or December onwards. So we almost have three quarters of sizable rate levels are in the market. So we started dropping from the December onwards and now it is almost coming to the bottom. So the first, I could say, almost eight to nine months, we had a good margin due to different rate levels, which was offered by the shipping lines. And same being the selling rate was quite good in those times, first eight to nine months. So these are the basic good contributors for our pipeline. Though our volume rather slowed down or value of the transaction has slowed down, but we could manage to see a close of our previous year’s top line, which was INR528 crores. And we actually did this year INR522 crores. So there was a marginal difference. That’s where whole our focus and activity wise push what we did into the previous figures.<\/p>\n

Daniel<\/strong> — — Analyst<\/em><\/p>\n

Okay. Okay, sir. Thank you for your answer, sir. And you mentioned about the competitions or challenges that business might be facing. So if you could explain me how are you addressing those challenges in the market to keep up again?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Okay. See the only way we have to do is to step up our sales effort. We have — we are in the process. We have hired nearly five sales, additional sales and customer services and which has contributed to the increase in volumes and we are in the process of hiring some more. In the initial stages, the cost will be a little up, but for sure in the next six months we will have recovered those costs and gone ahead of what we have planned.<\/p>\n

Daniel<\/strong> — — Analyst<\/em><\/p>\n

Okay, okay. Okay, sir. Thank you so much for all the insights and I wish you the very best.<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Thank you.<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

Thank you very much.<\/p>\n

Operator<\/strong><\/p>\n

Thank you. [Operator Instructions] The next question is from the line of Rohan Mehta [Phonetic], an individual investor. Please go ahead.<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

Yes, good afternoon, sir. Good afternoon. Sir, you mentioned about the freight charges having, you know, gone up because of which we’ve had a dip in revenue and profit. So what can be expect, coming couple of quarters are freight charges expected to continue to increase or remain flat or any views?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

First, you have got it incorrect, because freight charges haven’t gone up. The freight charges have gone down.<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

Right, right. Sorry, I meant the other way round, because of which we have been —<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Because our turnover comprises of the freight. So once the freight charges drop, our turnover also goes down. Now having said that, we don’t expect any dip further because it is already bottomed up. For the next two quarters, we expect that it will be more or less on the same level, maybe 5% here and there from the freight level. And from January, it is expected that China will be in full swing of production. The economies would revive a bit in Europe and U.S., and then we will see some upward revision in the freight levels because these freight levels are not congenial to operate vessels for the shipping lines, you know. So it is like bottomed up. These are my views, can go down by 5% here and there but not more than that. So now it is a matter of how we market, how we sell and how we get more business.<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

Okay, and maybe January onwards some improvement can be…?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

That is what is expected.<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

Right, right. Okay. And sir, so on an average what is the sort of average number of shipments that we are doing per month, roughly?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

See, I would not talk about average number of shipment, but I will talk about average number of containers that we took and those are about 3,000 containers a month.<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

3,000 a month. All right, sir. And amongst LCL and FCL, which segment gets us higher margins?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

LCL.<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

LCL. And so what, do we have a rough breakup of LCL and FCL?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Our LCL is about 65% to 70%.<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

Okay. And that will remain the same break up?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

More or less — no, I wouldn’t say that the breakup will remain the same because we see a growth in FCLs in the coming days. LCL globally constitutes just 1.25% of the global business. So whatever it goes up, it is a very miniscule percentage of growth. We can’t expect a huge growth in LCL, but if we have to do well, we have to increase our FCL to those levels and maintain profitably and the supply also. And that is what we are working on.<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

If FCL contribution to revenue increases, then overall margin would slightly get affected because as you said, FCL would be a relatively lower margin than LCL?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Yes, of course, but at the same time, when there is not much of increase in the LCL business, we cannot be just sitting and looking at better margins, right? We have to increase our turnover. We have to increase our profit. In percentile basis, it may be less, but in actual terms, it will be there.<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

Right, right. Fair enough, sir. And sir, this quarter or overall this year how much business have we done from Abhilaya?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Oh, Srikant can you please?<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

This month of April we have achieved 24.50 lakhs shipments that are now of INR6.47 crores and May will be closing a little more, 27 lakhs plus shipment, which should be giving us close to INR6.80 crores turnover, probably more, little more.<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

Per month?<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

Per month, yes. Okay, and that would be sustainable over the next few quarters?<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

Yes, definitely.<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Not only sustainable, it will increase.<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

It will increase, okay. And sir, just a couple of other questions. Is there any plan to increase the number of ports under our belt this year?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

You are talking about Total Transport now?<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

Yes, yes.<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

See, at this point in time, we are not looking at ports. We are looking at cargo generating centers. You know, like from the cargo units, we want to put up our sales offices. This year, the whole target is to push in more sales. So that is what we are looking at. We, as far as operations are concerned, we are able to handle cargoes Pan-India. We don’t need to add force. We need to add cargoes.<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

Cargoes, understood sir. And just a last question, do we have any plans to increase our stake in RN Freight from the current time?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Not at this point of time.<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

And sir, just touching upon Abhilaya once again, as we had sort of launched 50 odd EV scooters under Abhilaya, but they were — as I understand — exclusively for Amazon. So is there anything in the pipeline for some other clients also for last mile delivery?<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

We will be doing it for Flipkart but that will be after second quarter.<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

After second quarter, all right.<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

We are — really one of the advantages we are getting with this is [Technical Issues] once we are through with our study, then we will take a call.<\/p>\n

Rohan Mehta<\/strong> — — Analyst<\/em><\/p>\n

Okay. All right. Understood, sir. Okay. Thank you. Thank you so much and all the best.<\/p>\n

Makarand Pradhan<\/strong> — Managing Director<\/em><\/p>\n

Thank you. Thank you.<\/p>\n

Operator<\/strong><\/p>\n

Thank you. Ladies and gentlemen, as that was the last question for today, I would now like to hand the conference over to Mr. Shrikant Nibandhe, Promoter and Director, for closing comments. Over to you, sir.<\/p>\n

Shrikant Nibandhe<\/strong> — Director<\/em><\/p>\n

I wish to express my gratitude to the whole TTSL team for their continuous efforts and devotion, all of which help us as a company to advance despite changing market conditions. Additionally, I want to thank you all for taking a part in this conference call. If you have any additional questions, please do get in touch with our AdFactors Investors Relations team. We will be glad to reply with all your questions. Thank you very much and have a lovely day ahead.<\/p>\n

Operator<\/strong><\/p>\n

[Operator Closing Remarks]<\/p>\n","protected":false},"excerpt":{"rendered":"

Total Transport Systems Limited (NSE:TOTAL) Q4 FY23 Earnings Concall dated May. 31, 2023 Corporate Participants: Shrikant Nibandhe — Director Makarand Pradhan — Managing Director Nitin Phadke — Vice President, Finance Analysts: Sudhir Bheda — Right Time Consultancy — Analyst Hiral Nandu — Kalpavruksh Capital — Analyst Nikhil Arora — — Analyst Daniel — — Analyst […]<\/p>\n","protected":false},"author":1905,"featured_media":147581,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[6349],"tags":[8159,8143],"class_list":["post-148333","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-transcripts","tag-logistics","tag-transportation"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/05\/Transcript-thumbnail.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":130726,"url":"https:\/\/alphastreet.com\/india\/aether-industries-ltd-q4-fy22-earnings-conference-call-insights\/","url_meta":{"origin":148333,"position":0},"title":"Aether Industries Ltd Q4 FY22 Earnings Conference Call Insights","author":"Praveen","date":"June 20, 2022","format":false,"excerpt":"Key highlights from Aether Industries Ltd (AETHER) Q4 FY22 Earnings Concall \u00a0 Q&A Highlights: Gagan Thareja - ASK Investment Managers - Analyst Would growth get constrained due to lack of capacity for the first 3 quarters of FY23? 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